Toyota is to cut its managers' winter bonuses by 10% and reduce production of its Lexus range of luxury cars as it struggles to cope with the biggest slump in the global auto industry for almost 40 years.

The world's second biggest car-maker said it would reduce winter bonuses for about 8,700 managerial level staff, but declined to say how much the measure would save.

It will also halt Lexus production at its central Japan factory for two days at the end of the month. A second plant operated by a subsidiary will also stop making the model for two days.

Lexus sales have dipped sharply in the US and fell by 24% over the past year in Japan.

The global slowdown has badly shaken Japan's automakers, which rely on the US market for around half of their profits.

Last month Toyota estimated net income would reach ¥550bn (£4bn) through to the end of March 2009, well down on an earlier prediction of ¥1.25 trillion and a 68% drop from last year.

The firm is also expected to reveal a dramatic fall in sales and production estimates by the end of the year.

Its sales in Japan, excluding the Lexus range, fell 27.7% in November, while Nissan's sales dropped 29.5% and Honda's 21.6%.

The crisis in the US car industry has prompted General Motors, Ford and Chrysler to plead for government money to stay afloat. But analysts warned against drawing comparisons between the Big Three and their Japanese rivals.

"To compare Toyota, Nissan and Honda to General Motors is ridiculous," Andrew Phillips, an auto analyst at KBC Securities in Tokyo, told theguardian.com.

"GM is burning through cash like there's no tomorrow, has a very weak balance sheet, but Japanese companies aren't losing money yet and have strong balance sheets. You just can't compare the two."

Nonetheless, Japan's car-makers suffered their biggest drop in sales of new vehicles for 39 years last month, according to the Japan Automobile Dealers Association, by 27% to 215,783 vehicles.

Toyota's sales in the US, the world's biggest car market, dropped by 23% in October, with those of Nissan and Honda falling 33% and 25%.

Firms have slashed sales forecasts, lowered production and cut the number of part-time and temporary workers amid plummeting overseas demand and the yen's seemingly unstoppable rise against the dollar and the euro.

"From an earnings perspective the volume weakness is compounded by the strengthening yen" Phillips said. "At first it was mainly the US dollar but now the yen has strengthened against the euro and other currencies, so FOREX is taking a huge bite out of their earnings."

Earlier this week Carlos Ghosn, who brought Nissan back from the brink of bankruptcy when he became chief executive officer almost a decade ago, warned that car-makers faced massive job losses and urged governments in the US, Japan and Europe to come to their rescue.

"It is important for governments to finance industries that employ a lot of workers," he told a symposium in Tokyo. "The credit crunch has made it difficult to finance day-to-day operations.

"Job destruction will be massive in those countries that do not rapidly help the auto sector to finance itself. It will not be seen immediately, but in a few years."

Phillips said Toyota's decision to trim managers' bonuses was intended as a gesture and would have little financial impact.

"It's a very Japanese gesture, just as there were no board bonuses at Nissan [in June 2007] when it missed its sales targets," he said. "Ten percent may not amount to much, but given the very stringent cost controls at these firms it helps morale if workers at the bottom end of the scale know that that those at the top are sharing the pain. It also sends out a very different message from the one being given by the Big Three in the US."